Mobile Payments and NFC | Ericsson Internal | 2014-03-25 | Page 2
2,2B
6Bmobile phone users in
the world
prepaid accounts
served by Ericsson
Charging System
2,5Bpeople lack bank
accounts in the world
50Breal-time transactions
handled per day
Slide subtitle
Sub saharan africa
By 2019…
557 MSmartphone
Subscriptions
930 MMobile Subscriptions
X 20Mobile Data
Traffic growth
710 MMobile
Broadband
Subscriptions Source: Ericsson Mobility Report, 2014
Mobile Payments and NFC | Ericsson Internal | 2014-03-25 | Page 4
Mobile moneyis gaining momentum
* GSMA MMU Mobile Money Tracker 25th March 2014
** Source: GSMA MMU State of the Industry Report 2013
228*
203M**Registered Accounts
~61M*Active users by
June 2013 – 90
day period
225*Live deployments
in emerging
markets February
2014
13**Deployments have
more than 1M active
mobile money users
84Of deployments
are by Banks
Mobile Payments and NFC | Ericsson Internal | 2014-03-25 | Page 5
M-commerce –more than payments
Orientation
M-commerce services
Financial services
Payment services
Choose and
purchaseFinance and pay
Get started, use
and consume
Service and
relationship
› Advertisements
› Promotions
› Aggregate/resell
› Shopping carts/tools
› P2P
› P2B
› B2P
› B2B
› Accounts
› Cash handling
› Savings
› Loans
› Insurances
› Information services
› Other financial services
e.g. investment products
and foreign exchange
› Digital commerce services must support users’ “channel-hopping” throughout their shopping journey
› Payment services feature in the intersection between m-commerce and financial services
› Delivery and
pick up services
› Tickets
› Receipts
› Loyalty programs/
rewards
M-commerce services
Mobile Payments and NFC | Ericsson Internal | 2014-03-25 | Page 6
Angolademographics
› ~20 million population
› Massive GDP growth (~11%, more than China)
› Low Inflationary Environment
› ~30 Commercial Banks with 70 Branches /
Million inhabitants
› 50% of the total
population Banked
› High growth potential in Financial Sector
Source: KPMG, Worldbank
Mobile Payments and NFC | Ericsson Internal | 2014-03-25 | Page 7
Mobile reduces cost to serve customers
MOBILE ECONOMICS ACCESS TO NEW CUSTOMERSENABLES
Mobile Payments and NFC | Ericsson Internal | 2014-03-25 | Page 8
Remittance opportunity
› Inflows coming into
Africa
› Pan-Africa estimated
to be large
› Price levels vary
$31B
Source: Boston Consulting Group
5-25%
Mobile Payments and NFC | Ericsson Internal | 2014-03-25 | Page 9
Market regulatory variations
WALLET
PLATFOR
M
› Bank dominance and
exclusivity
› Driven by risk mitigation
and reluctance to engage
“unfamiliar” partners
› Single point of regulatory
oversight
› Control and ownership of
enabling infrastructure
WALLET
PLATFOR
M
› Effective “marriage” of the
telco and bank
› Imaginative regulatory
solution
› Full participation by
stakeholders
› Supports the social
financial inclusion agenda
WALLET
PLATFOR
M
› New players, new risks,
new experiences
› Knowledge of customer
sector and needs
› Passion to diversify and
drive sector
› Positioned to “win”
BANK LED
MODEL
MNO LED
MODEL
AGENT BANKING
MODEL
Mobile Payments and NFC | Ericsson Internal | 2014-03-25 | Page 10
M-commerce business models
Instance Description Status
MNO as
bearer› The MNO simply acts as a bearer network for m-commerce › Outsourcing
MNO as
agent › MNO acts as an extension to the bank’s distribution network
› Gaining popularity
within most
jurisdictions
Bank
issues e-
money
› The MNO offers e-money accounts, backed by the bank
– E-money accounts allow for mobile transfer and payment
services, but are not interest-bearing accounts or credit.
– Money deposited is managed by the bank (or banks), which
also perform settlement, system monitoring and other bank-
end functions
› Limited to e-
money
MNO has
e-money
license
› The MNO has an e-money license› PSD/EMD
MNO as
bank› The MNO is a bank
› Allows MNO to
compete as financial
institutions
Notes: 1 E-money refers to value stored on an electronic device equivalent to the cash paid to acquire it
Source: Harvard Kennedy School’s Publication; Radix Consulting Corporation; Pyramid Research; Mobile money for the unbanked reports; Mobile Money Summit 2011; Credo research
Ba
nk-l
ed
mo
de
lsM
NO
-led
mo
de
ls
Mobile Payments and NFC | Ericsson Internal | 2014-03-25 | Page 11
SWIFT
(financial
industry)
Money
transfer
Internet
companies
Emerging
Market Mobile
wallets
CONNECTING THE
ECOSYSTEMS
building the open-money®network
Mobile Payments and NFC | Ericsson Internal | 2014-03-25 | Page 12
Industry practice for Key processes
Record keeping
Compliance Control
Training and risk awareness
Abovementioned must be ensured & demonstrated by robust governance arrangements, including a
clear organisational structure with well-defined, transparent and consistent lines of
responsibility
Risk assessment, mitigation & Incident response
Record keeping
Risk assessment, mitigation & Incident response
Compliance Control
Record keeping
Risk assessment, mitigation & Incident response
Training and risk awareness
Compliance Control
Record keeping
Risk assessment, mitigation & Incident response
Regulatory reports & inquiries
Customer Due Diligence & Monitoring/ screening of transactions
Mobile Payments and NFC | Ericsson Internal | 2014-03-25 | Page 13
Learnings Consumer pilot 2011/12
Robust Due Diligence includes
› Know Your Customer (KYC) Process, featuring
At the customer registration
Personal verifiable data
background checks
documentation
sanction’s checks
review during business relationship
During ongoing business relationships
Review and audit process
Enhanced Due Diligence
Assessment and profile update
Transaction monitoring and screening
Sender / Receiver names screened against Sanction lists (OFAC SDN, EU and UK lists globally)
Monitoring and timely risk mitigation
Reporting to Law Enforcement Authorities
Review & update process of monitoring/screening rules
Mobile Payments and NFC | Ericsson Internal | 2014-03-25 | Page 15
Our ecosystem partners
Ericsson Wallet Platform (and Converged Wallet) is fully
Western Union certified enabling users to send and receive
money across international borders directly from their
mobile phone
Partnership to launch m-wallet services in Africa and the
Middle East. MTN has more than 6 million Mobile Money
subscribers in 12 countries
A strategic partnership to enable a “one-stop-shop” for
Eurogiro members sending to mobile wallets via Ericsson
Interconnect Services
Partnership to receive money transfer via Ericsson
Interconnect Services
Project to launch m-wallet services in Senegal. Ongoing
discussions in other countries.
Mobile Wallet Solution Implementation for Telkomcel
Making open loop solutions possible and connectivity to
global payment network that support NFC enabled services
Mobile Payments and NFC | Ericsson Internal | 2014-03-25 | Page 16
Partnership with western union› Alliance to accelerate the interconnection
between the potential m-commerce
ecosystem and the existing financial world
› Certification of Ericsson platform for Western
Union (WU) Mobile Money Transfer Network
to support mobile operators in further
accelerating their launch of mobile money
› Current cooperation on sales: WU further
enhances the functionally of our platform.
Ericsson adds an important channel to
MNOs and the telecom-grade platform
› The medium-term ambition is to provide
turnkey solution to MNOs
Link to press release
Mobile Payments and NFC | Ericsson Internal | 2014-03-25 | Page 17
partnership with Eurogiro
› Established in 1989, Eurogiro is a
cooperation of postal organizations,
banks and financial service providers,
covering more than 500,000 branches
around the world
› The partnership will provide an
interconnecting path between banks and
other payment service providers, money
transfer organizations, mobile network
operators and mobile handsets
› It is a strategic partnership to enable a
one-stop-shop for Eurogiro members
sending to mobile wallets
Link to press release
Mobile Payments and NFC | Ericsson Internal | 2014-03-25 | Page 18
RESULTBUSINESS BENEFITS
› Robust new platform using
time-tested systems
› Open API enabling easy integration
and quicker time-to-market
› Improved customer experience
› Consolidated account view and
customer lifecycle management
MTN RwandaMOBILE FINANCIAL SERVICES LEGACY PLATFORM SWAP
Improved
operational
efficiency
Increased service
adoption and
usage rates
Mobile Payments and NFC | Ericsson Internal | 2014-03-25 | Page 19
RESULTBUSINESS BENEFITS
› Entry into market with huge growth
forecast
› Integration between banking and
mobile services domains
› Innovative solution to keep up with
changing requirements
Millicom SenegalGREENFIELD MOBILE FINANCIAL SERVICES IMPLEMENTATION
Developed new
revenue streams
Customer achieved
stickiness in a
competitive market
Mobile Payments and NFC | Ericsson Internal | 2014-03-25 | Page 20
› The social promise of
Financial Inclusion is
attainable through effective
partnerships
› Fit-for-purpose regulations
needed to create the
enabling environment
required for imaginative
participation
› New players bring
innovation, direction and
drive
summary
Mobile Payments and NFC | Ericsson Internal | 2014-03-25 | Page 21
Let’s Create an Open Money SocietyBring finance and telecom together
to empower people and businesses
everywhere.